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Raising the proportion of (cheaper) debt to increase the return to equity shareholders is known as:
Awealth maximisation
Bfinancial planning
Ctrading on equity
Dworking capital management
Answer & Solution
Correct answer: C. trading on equity
Trading on equity uses cheaper debt to raise the earnings available to equity shareholders.
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Sound financial planning aims to ensure that the firm has:The cost incurred by a company to raise its funds is referred to as the:Other things being equal, a company that uses a higher proportion of debt faces higher:The primary objective of financial management is generally taken to be:The capital invested in long-term fixed assets such as plant and machinery is called:The capital required to finance day-to-day operations of a business is called:The use of fixed-cost debt funds to increase the return to equity shareholders is known asThe mix of debt and equity used by a company to finance its assets is called its: